One of the biggest differences when purchasing a condo rather than a house is the cost of maintenance fees. You may be pre-approved for a mortgage of a specific amount, but have you enough saved for the monthly condo maintenance fees? And what exactly is included in them? Here is a simple break down to prepare you whether you are looking to purchase a condo for the first time or simply want to learn more about your own condo.
What Do Condo Maintenance Fees Cover?
This will vary from building to building. Generally, they will cover the common elements of the building such as your amenities, your parking garage, building insurance, concierge, snow and garbage removal, and landscaping.
Some condos will have contributions of the maintenance fees go toward utilities such as water and heat, some will even include hydro and air conditioning, or internet and cable. If you are researching condos to purchase, be sure to not only ask how much the monthly maintenance fee is, but what is included in that fee.
Is There Something Maintenance Fees Will Never Cover?
Yes! It is very important to understand that paying for condo maintenance fees does not give you the same ease of responsibility as you would have if you were living as a tenant with a lease. As a tenant, if your floor starts coming apart, your landlord will come and run to save the day. As a condo owner, your maintenance fees will not be footing this bill. So, while condo maintenance fees will cover costs for a lot of external items that a house owner would have to pay for out of pocket, you are not spared from all responsibilities. Another cost that is not included in maintenance fees is property taxes, so be aware of this when creating your budget as well.
How Much Should I Be Paying In Maintenance Fees?
This is also a question that is dependent on which building you are interested in. The general rule of thumb is that your monthly maintenance fees are calculated in direct proportion to the square footage of your condo as well as the costs related to the utilities and amenities available to all residents in the building. Therefore, logically, the smaller the condo or the fewer the amenities a building offers, the smaller the maintenance fees and vice versa. You may discover you really would be happy to pay for a gym in your building, but not a pool. Make sure you are paying for what you want – why waste your money on amenities you will never enjoy?
Maintenance fees can vary greatly. They will be dependent not only on how many amenities your condo provides, but also on the age of a building and how many suites are in the building. The general trend will be that the newer the building the fewer the condo fees, but this is not always the case. As a building ages, a good board will do their level best to keep down monthly maintenance fees. However, how well a building is built and maintained in the early years can provide a good indication of how much upkeep it will need in the later years. As well, the fewer suites in a building, the higher the fee per unit as the number of contributors is lower. This is part of the reason that boutique buildings have generally higher maintenance fees.
Be sure to look into your potential board’s reserve fund to see how much money is available for unexpected repairs and emergencies.
A low condo fee is appealing to a buyer. It means that they are only paying slightly more than what they anticipated with their mortgage rates. However, it is important to remember that just because you are paying less that does not mean you are getting more value for your money. Really get to know the ins and outs of your potential condo maintenance fees and your board to ensure you are getting what is right for you. If you have any questions that have not been answered here, please do not hesitate to contact me! I have 36 years of experience selling condos in Toronto and have a solid understanding of what is included in each of the fees.
